Category: surety

‘GMH provided loans to Qucomhaps of around $4,000,000 to assist it in purchasing the business of the aircraft manufacturer, Moravan. Repayment was secured by a personal guarantee from Mr Harkin, Qucomhaps’ managing director. Further GMH was granted fixed and floating charges over the assets of Moravan Aviation, a wholly owned subsidiary of Qucomhap which had acquired the assets of Moravan.’

‘I read the decision in Ziggurat with some incredulity. I hadn’t intended to trespass on Karen Spencer’s territory, and overall I’d agree with her conclusion that the amendments made to the ABI form seem to have confused rather than clarified matters. I’d also agree with Roddy Cormack’s comment that more radical surgery is needed if the employer wishes to secure earlier payment following the contractor’s insolvency. But I did want to offer some thoughts on what the decision tells us about wider issues in the surety bonding market.’

‘The guarantor of an insolvent commercial tenant cannot be held liable for outstanding obligations if changes were made to the lease without its consent which had the “potential” to increase the burden on the guarantor, the Court of Appeal has confirmed.’

“The rule in Holme v Brunskill (1878) 3 QBD 495, permitting the discharge of a surety’s liability under a guarantee, only applied where the parties to the principal contract guaranteed had varied the terms of that contract without the surety’s consent.”

“The UK supreme court announced this week that it was looking to recruit a couple of new judges (at salaries of £206,857). There is one immediate vacancy following the death of Lord Rodger last month, and there will be a further vacancy next April when Lord Brown retires. Who will get the jobs?”

“A guarantor of a debt could not set aside a statutory demand served by a creditor where the creditor had security over the assets of the principal debtor, and so could not serve a statutory demand on the principal debtor because of rule 6.5(4)(c) of the Insolvency Rules 1986, but had the benefit of an unsecured debt owed by the guarantor.”

“A creditor was under a duty to disclose to the surety any contract or other dealing between creditor and debtor which changed the position of the debtor from that which the surety might naturally have expected, but was not under a duty to disclose to the surety other matters relating to the debtor which might be material for the surety to know.”

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